Holly's Blog: Welcome back from Boring Money!

Welcome back after the summer everyone. I hope you all managed at least a few days somewhere sunny. And – other than smug Scottish readers who have already booted the bairns out – many of us are on countdown to send the wee blighters back! YAY.

In other big news, I am actually f-f-f-can’t-say-it-yet today. As a clue it’s old enough to mean that I want some gardening gloves, a hot water bottle and a saw for my birthday :0) I did a Peloton class this morning and the *******s had already moved me up a decade bracket, in a cruel shock to the system. I thought that was a bit harsh. I wasn’t actually born till 6pm so there.

Apart from contemplating wrinkles, Botox and cake, what else is occupying my mind today?

I normally down tools over August, maintaining the most minimal review of markets, usually just a quick regular squizz at my own portfolio to check nothing has gone to pot. Adopting this rather unscientific approach, here is my quick summary of the last three months.

The Impatient Idiot’s Guide to Global Markets This Summer

• FTSE 100 – not much

• Gold – down a smidge

• Commodities – nada

• Emerging markets – yawn (to be clear– yawn as in “I’m still at sea level but I’ve been to Hades and Heaven in between”)

• Global shares – slightly positive driven largely by a higher US index (Fundsmith Equity has a 72% US weighting and is up about 10% in three months, and the Vanguard LifeStrategy 100% Equity has notched up about 6%)

So in summary I haven’t missed much and everything is trundling along with a bit of oomph in the States. Voila.

Sustainable Trends

However one thing does stand out to me. One obvious common denominator of returns over this three-month timeframe is the word ‘sustainable’. Whatever your take on the fundamentals, momentum is hard to ignore. And as a former currency trader reminded me over the summer, there’s seldom any point in fighting a trend.

Here are three examples. Stewart Investors have an Asia Pacific Leaders Sustainability fund which is up 10%. Liontrust’s Sustainable SF Global Growth fund is up about 15% and Brown Advisory US Sustainable Growth is up over 20%. Inflows are up and the sector is booming.

Over the summer we asked over 1,500 investors what they thought about sustainable investing in our 4th Annual Survey. Opinions are divided but people are generally positive. The old belief that this approach means sacrificing returns has disappeared. 20 years ago, ‘ethical investing’ was all about what you couldn’t have – and frankly fags and oil made money and lots of people wanted them. But today there is recognition that there is a wall of policy money and consumer appetite fuelling growth in sustainable businesses – and so it’s more about positive inclusion rather than negative exclusion. It’s more feel-good, common sense and less pious.

On the flip side all that glitters is not green. Despite broad interest, investor scepticism about so-called ‘greenwashing’ has shot through the roof, as every firm under the sun boasts about their green credentials. Even Net-a-Porter are trying to sell me sustainable trainers. (BTW ladies I don’t buy, I just look, honest! Too tight/sensible. Top tip: try The Outnet instead!

Back to investments and it seems we don’t buy the reinvention en masse of fund managers into global Swampies and Fair Pay activists, here to protect the icebergs and fight for workers’ rights. Funny that!

So how to avoid the marketing b*llocks? As a practical tip, if you are interested in looking at funds which have an independent sustainability rating you can see alongside performance and other facts, Morningstar has an ESG screener tool which is quite helpful. https://www.morningstar.co.uk/uk/screener/esg. With over 500 funds bearing the word ‘sustainable’ in their name launched last year in Europe alone, for gawd’s sakes don’t just go by the name alone. The regulator is currently consulting on new rules to enhance climate-related disclosures – so the stick is coming, to reinforce the often-misrepresented carrot.

If you want some ideas, we’ve partnered with Morningstar in this quiz which maps some credible funds to your sustainable preferences. Is climate change your number one driver? Do you just want to be broadly sound? Or do you simply want to make as much money as possible? https://www.boringmoney.co.uk/learn/learning-paths/sustainable-savers

Hmm. What else does the future hold?

Aside from increased grumpiness, arthritis and digital adverts for Saga Holidays?
Where to from here? When will these markets run out of steam? Which sectors and regions will thrive? Can tech giants keep on growing at this pace? We’re hosting a webinar on 28th Sep at 6pm to tackle these questions and more. I know many of our readers have (or have had) a stake in the Scottish Mortgage investment trust, and I’m genuinely excited to confirm that my guest will be Catharine Flood, the Corporate Strategy Director for Scottish Mortgage Investment PLC. Put simply Catharine works with the fund management team to help them work out what’s good and what’s not – and then talks to people like me about it.

We will chew the fat on future trends, opportunities, risks and growth. I probably will ask her about chunky holdings Tesla, Moderna and Tencent like everyone else. But we’ll put some more original questions to her as well! You can register for this free webinar here, send in your questions or post them live during the event.

That’s enough excitement for one week. I have an amazing weekend planned complete with a family party tomorrow with champagne and Sumo wrestling suits. I am going to take on my Mum and sister. #nomercy Have a great weekend!

Holly